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Is Your IT Department Your Vendor of Choice?

One of the great things about TMC’s (News - Alert) ITEXPO Austin 2012 event is that not a day, or for that matter a few minutes, goes by where I hear something that captures the moment and articulates a view of what is going on in our industry in a profound way. In moderating a panel, “Migrating your apps to the cloud: planning and key considerations,” there was such a moment.

I had asked panelists (Jay Judkowitz, Director of Product Management, Nimbula, Gurmeet Lambda, Vice President of R7D and Chief Architect Unified Communications Management, OPNET and Damon Martin, VP Sales Global Accounts, West IP Communications (News - Alert)), a question about why the cloud is picking up momentum and what obstacles remain for it getting more traction in large entities outside of government mandated consideration.

In fact, I was curious why after all the years and all of its different names, shared space computing capabilities aka “cloud,” computing and communications functionality delivered as a service was not only becoming attractive to SMBs but increasingly for large enterprises. I even included the caveat that obviously the question was framed with situational recognition that I was talking about the cloud generically. I was not attempting to pick winners and losers between premises-based solutions, hosted solutions, private clouds, public clouds, hybrid solutions, multi-tenant vs. single tenant, etc.

After a detailed discussion by each of the panelists that included all of the usual reasons we all have heard about the benefits of moving to the cloud —scalability, extensibility, accessibility, the XaaS business model that reduces CapEx and gives OpEx consistency (“pay as you go” and “pay as you grow”) capabilities, the value of the cloud as a platform for rapid development, testing and deployment, and a few other really good one — Jay Judkowitz stated, and the others immediately agreed that at the end of the day the real question is, “Is your IT department your vendor of choice?”

Wow! Given the entire industry buzz about the usual suspects causing all of the turbulence and opportunity in the market — cloud, mobility, social networking, virtualization, BYOD, etc. — there it was out on the table for discussion. After all is said and done, this is the question that C-levels need to answer when thinking about their investments in technology.

I had asked it this is a different way earlier in the session. It was done in the context of a question about control versus ownership. I wanted to know how much ownership large IT departments might be willing to give up if the perception is that what they really are giving up is control, and possibly their jobs, when they move to the cloud. Interestingly, it got several knowing nods for IT people in the audience.

This lead to observations by the panel and myself that all of the reasons large enterprise IT departments tend to provide as to why not the cloud and why not now have been or are on the way to being solved by the industry. This includes thorny issues surrounding compliance, corporate governance and security. In fact, it was observed that from a performance and security perspective the cloud for various large companies has been demonstrably shown to be higher performing and more secure than previous hosted or private solutions. It also speaks to the fear that IT may fear it will keep the accountability for problems without necessarily having all of the tools they need to be so which makes them fair game if things go bad. Accountability models in cloud ecosystems, for example, are evolving as the market matures. This is because the vendors know it is not in their interests to not have the terms and conditions of engagement clearly specified, particularly since people are not just putting apps in the cloud but their business. Let’s just say the liability involved is such that having carefully crafted SLAs is table stakes. But, I digress. What about that question?

From a purely economic perspective it gets to the heart of the matter regarding cloud adoption in large entities. Let’s face it; the cloud does off-load many IT responsibilities along with headcount and cost. Thus, intuitively it is attractive to C-levels of the non-CIO variety from a short-term ROI perspective and possibly from a TCO one as well. It is also attractive to them because many if not most are running their businesses off of tablets and smartphones and they now have expectations about regarding their customer experience that have become IT priorities to resolve, all the while doing more with less and managing risks in a very risky world.

However, there is a more practical question being asked here. It is about whether in what I have called “The Age of Acceleration” —whose major attributes are that the only constant we know is the world is about dynamic change which must be accommodated and the need to do so is picking up to the point where real-time may be too slow — is the cloud or rolling your own the best way to keep pace?

For the moment, the answer is yes! If you think that is an odd answer consider it this way. That is the answer that says, depending on who you are, what you need, where you would like to go based on a variety of economic and culture business imperatives, there needs to be now and going forward a division of labor. What I mean is that IT does, is accountable for and owns certain critical physical and virtual assets. The cloud has the rest but under carefully crafted policies and rules that allow IT the control it needs to be both responsible and accountable. This will be transformation in a real sense and it will be a revolution that happens in evolutionary steps and time.

How all of this will play out in the market and at what speed is anyone’s guess. What I do know is this is a question that is highly relevant, and I look forward to see where we are in getting a bit more clarity around the answer at ITEXPO Miami 2013 this coming February.